Not sure whether you should pay all cash when purchasing an engagement ring? Well, the question isn’t as simple as it may seem. At first thought, you’re probably thinking, “Duh, that’s the best way to go if you have the money”. That’s not always the case. There are actually some benefits to using other methods of purchase, like a credit card. It really comes down to your financial and credit status whether or not it’s a good idea to pay in cash for an engagement ring.
First of all, it’s always good to shop for an engagement ring within your budget. Don’t try buying an expensive ring that you can’t afford.
If you’ve saved up enough money to buy the perfect engagement ring that you know your significant other will love, you don’t necessarily have to pay with cash. Here are some things to first consider.
Taking Advantage of Rewards & Special Offers
Even if you have enough money saved up to pay in cash doesn’t mean you have to. You can still take advantage of reward points if you have room on a credit card that offers rewards. Many credit cards have cash back rewards or maybe even sky miles if you travel a lot. If you pay for the engagement ring with your credit card you take advantage of any card rewards and then pay off the card immediately after with the cash you saved up.
There may also be special offers available like 0% financing for the first 12 months on a new credit card that you could take advantage of. You could still pay off the card quickly but it would give you a bit more flexibility without incurring additional fees from interest. As an added bonus it’ll add to your credit history which can help improve your credit score, especially if you pay it off quickly.
Better Rates for Cash?
While cashback rewards for using a credit card may be a great selling point, you should also check to see whether the store you’re buying from offers discounts for paying with cash. Usually, this is only the case when paying cash versus financing, but it’s certainly something to check into. If you can get a better deal by paying with cash that saves you more than what you’d get from credit card cashback rewards then paying cash may be a better option.